HSBC.

With assets of US$ 2,758 billion, HSBC with head office in London ranks as the world’s second largest bank after Industrial & Commercial Bank of China. Yet with all its control systems, due diligence and compliance regulations HSBC has managed to wriggle itself out of a series of unscrupulous maneuvers such as

  • PPI misselling
  • Interest rate derivative misselling
  • Eribor manipulation
  • Misselling of mortgage-related bonds
  • Forex manipulation
  • Violation of international sanctions
  • Weaknesses in money-laundering controls

In the period 2011 to 2013 8,844 British customers deposited more than £ 14 billion in HSBCs Swiss banking unit. Leaked bank reports have revealed that HSBC allowed customers to withdraw “bricks” of untraceable cash and open undeclared “black” accounts.

Global outrage over offshore tax evasion has forced Switzerland to dilute one of its most famous exports: bank secrecy. The country famous for its financial discretion has agreed automatically to exchange information about individual accounts, taxes, assets, and income with 50 other nations by 2018. It has already entered into individual “information exchange agreements” with countries such as Britain and America, forcing hundreds of account holders either to pay a fine or see their details fed to the taxman at home.

Secrecy laws, first introduced in 1934, remain strictly enforced. A breach of professional confidentiality is punishable by three years in jail. In 2013 Switzerland topped the Financial Secrecy Index list of most secret countries, beating Luxembourg and Hong Kong.

Perhaps as a result, the amount of money flowing into Switzerland is up from $668 million in 2011 to $ 739 in 2012. Swiss banks now manage an estimated $2.1 trillion of offshore wealth.

Even with recent leaks many of the world’s wealthiest will continue to bank in the grandfather of tax havens.

 

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